Singapore faces Economic Downturn

Singapore's economy shrank at an annualised rate of 6.6% in the three months to June, as a drop in drug output and the US slowdown hit growth, BBC News reported.

Like many Asian countries, Singapore is heavily reliant on exports to the US and is vulnerable to a slowdown there.

Inflation in Singapore is at a 26-year high and rising prices have also deterred consumers.

Many analysts expect a Formula One Grand Prix race in September to give growth a boost.

Compared with the same point a year ago, Singapore's economy expanded by 1.9% in the second quarter, down from 6.9% in the first quarter.

The city state still expects growth this year to be between 4% and 6%, finance minister Tharman Shanmugaratnam said. Last year, it grew by 7.7%.